MS. PERINO: Good morning. I have a few announcements for you. You saw
the employment report released this morning, the loss of 84,000 jobs and
an increase in the unemployment rate to 6.1 percent. There's no
question that the labor market is not as strong as we'd like and these
were disappointing numbers. We want to see the economy return to job
growth and we understand that this is a difficult time for many
Americans. We want everyone who wants to work to be able to find a job.

It's important for Americans also to know that in addition to these
numbers, there are other numbers that show that the economy is starting
to show some signs of growth. For example, the growth rate from last
week, and also on productivity and exports, those numbers have been
positive, which show that our economy is quite resilient even in spite
of the high energy prices and the housing crunch and the credit market
issues that are impacting our economy.

We also believe that the economic stimulus plan is continuing to have
the effects that we wanted it to have, and that combined with monetary
policy will continue to generate growth through this difficult period.

Also, President Bush will welcome President Alvaro Uribe of Colombia to
the White House on September 20, 2008. Colombia is a strategic ally of
the United States, and this visit underscores the deep friendship and
extensive cooperation between the United States and Colombia.

Also, on hurricane issues, the federal government continues to assist
state and local governments to help them respond to Hurricane Gustav.
The job is not over and the federal government continues to help them,
especially in regard to the power situation. We're doing what we can,
but we want to help those families get back to their homes and those
businesses get reopened.

The main priorities of state and local officials are power restoration
and reentry of those who evacuated. There are roughly 900,000 Gulf
Coast residents that still remain without power, and a majority of these
are in Louisiana. Full restoration is expected to take weeks in some
areas, especially in the coastal areas. We have moved federal resources
into that area and FEMA could provide you more.

In addition, we are also carefully watching and preparing for Tropical
Storm Hanna. This time of year is the peak of hurricane season, and so
we're seeing lots of activity in that area. This morning President Bush
called the governors of South Carolina, North Carolina, and Virginia to
discuss preparations for Hanna.

FEMA Administrator Paulison has also reached out to several east coast
governors, since the storm is predicted to come up the coast and even
our way here in Washington, D.C., just to make sure that they have what
they need and if they need help with plans as they prepare. So
Secretary -- let's see -- FEMA Administrator Paulison will have a
conference call for the media at 3:00 p.m. today for anybody that wants
updates from him there.

Finally, in the President's radio address he will discuss the ongoing
recovery from Hurricane Gustav and preparations for the upcoming storms
in the Southeast. He will also address the fact that after the past
four weeks of a break, Congress returns to Washington for a short time
before they leave again for the campaign trail. He would like to reach
out and let them know that we want to work together on bipartisan
measures to help strengthen America's economy.

For example, we have the Colombian and Korean free trade agreements,
which are important. If you look at those productivity and export
numbers, it underscores the importance of trying to get these free trade
agreements done when Congress comes back. We also want to extend relief
from the alternative minimum tax and obviously deal with energy, which
is America's biggest concern right now, the high price of gasoline. So
that will be in the radio address.

Q Since the President has the troop level recommendations before him
for Iraq, can you explain to us a little bit about how he is approaching
the process? Is this a -- is this a situation like we experienced a
year ago, where he sort of brings in a whole lot of people in addition
to his military advisors to talk about what he should do? Or is he
going to take them and think about it, and have a relatively short
consideration process? How might this work?

MS. PERINO: I think you might be comparing the surge process to the --
I'm not -- the surge process, in terms of the policy process --

Q I'm not saying it's apples to apples, I'm just trying to understand
the --

MS. PERINO: I don't recall in the last few times when President Bush
has worked with, or has gotten recommendations from General Petraeus,
that we have gone too far outside. Of course we -- the President gets
an update, as he did on Wednesday evening from Admiral Mullen and
Secretary Gates.

They took Secretary -- I'm sorry -- General Petraeus' recommendation and
ran that through the chain of command. And then they presented it to
the President. He's obviously talking to his national security team,
and we'll be consulting with members of Congress before we move forward.

Q And what sort of time line are we looking at here?

MS. PERINO: Well, I would think that it shouldn't take too much longer.
Obviously, he gets updates regularly, so he's well-informed as to the
state of affairs in Iraq.

And because he has that regular -- those regular updates, it shouldn't
take too long to be able to make a decision, especially since we're on
the trajectory of success that we've been on. The question on the
President's mind has been how do we make sure that we cement those
gains, and not jeopardize those gains and be able to continue the
process of return on success.

Q Do you think it's fair to assume he's likely to accept the
recommendation?

MS. PERINO: I don't want to put -- I'll let the President make his
announcement next week. But he obviously listens to the commanders on
the ground and to his military advisors.

And certainly there is something to be considered here when you look at
the economic, political and diplomatic aspects of this, how many troops
do you need to be able to help support some of those diplomatic efforts.
So that's why Secretary Rice's involvement is very important too.

Matt.

Q Dana, you painted a fairly upbeat picture of the economy despite
the job losses, and yet most economists say that the kinds of job losses
that were reported today tend to be the kind we see in the early stages
of a recession. What would it take for the President and the
administration to begin considering a second stimulus package?

MS. PERINO: Look, we've gone through the recession thing before. I
just told you that the last two quarters showed growth. There's plenty
of economists out there and they have -- they're very -- I'm sure
they're very intelligent and they have a lot of resources at their
fingertips, but I just haven't heard anybody talking necessarily about a
recession.

The economic stimulus plan that we put in place is having the strong
impact that we wanted it to have. One of the keys of that stimulus
package was that it be stimulative, and we don't think that we need to
consider a second stimulus right now.

One of the things we were concerned about and we warned about in the
last supplemental, where we extended unemployment benefits -- which was
not our preference, and we actually were able to shave back from 16
weeks back to eight weeks* how much longer those benefits would be
allowed -- part of what we were concerned about is that it lengthens the
amount of time that people would be out of work.

And I think we're seeing that reflected in some of those numbers today.
So we would want to approach any next steps very carefully. We need to
do a couple of things in the meantime. One is continue to work through
the housing crunch, through FHA Secure, or trying to help people stay in
their homes through HOPE NOW. In addition to that, there's the credit
market issues, and also the high energy prices.

But there are other things that we can do, which is to -- if we were to
be able to work with Congress in a bipartisan way to push forward on
these free trade agreements, we could increase the amount of exports
that we are -- that are leaving this country and that are really helping
us -- helping fuel the economic growth that we have.

But there's no question that a 6.1 percent unemployment rate is
absolutely unwelcome. It is too high in the President's mind. Compared
to other countries it's relatively good, but when it comes to America,
that's never good enough for us. We want to make sure that anybody who
wants to find work can find work. And so we'll continue to work with
Congress. We'd like to work with them in a bipartisan way. They've got
three weeks to do something before they leave for the campaign trail, so
we hope we can get something done.

Brianna.

Q You pointed -- one of the positive numbers that you're pointing to
is the growth rate for the last quarter, but it's widely accepted by a
lot of economists that it was the economic stimulus checks that went out
that was responsible for that. I mean, isn't that maybe pointing to an
artificially inflated number to say there are some strong areas of the
economy?

MS. PERINO: No, that is precisely the reason that we did the economic
stimulus package is so that we could get our country back on a footing
of growth so that it could help get us through an economic downturn. So
that's exactly why we did it.

And it's having the intended impact. The job growth has not caught up
to that though, and we hope to see that towards the end of the year.
That was what -- you know, we always said when we did the economic
stimulus package in January/February, when it was signed, that it was
going to take awhile, maybe through the end of the year, before we
started seeing turnaround on the job number situation.

Q Some people say that pointing to that number isn't actually showing
that the economy is strong.

MS. PERINO: Okay, you know what, as I said, there are so many
economists all over this country that will have lots of different
opinions. I'm sure CNN has lots of different economists; you can look
towards them.

But what I can point to you is the numbers that we have on -- that this
country's economic growth rate over the past two quarters has been
strong. And a lot of that is due to the economic stimulus package,
which is what we acted on, because we recognized that we were going to
be on an economic downturn.

I think you could flip the question on them and say, well, what if we
hadn't had the economic stimulus package -- then where would we be? So
I don't think it's false. The numbers are real. The numbers have come
in. So if they want to argue the numbers, I guess they can do that
amongst themselves.

Q Dana, to the Woodward book, if you have any comments on the
Woodward book in general? And particularly, the allegations of spying
on the Iraqi government? The Iraqi government spokesman said today, "If
it is true, it casts a shadow on the future relations with such
institutions," referring to the CIA and others. And your concerns about
whether this might slow down any sort of strategic forces agreement?

MS. PERINO: Okay. I haven't -- I don't have a copy of the book yet.
We did receive one or two at the White House late yesterday evening, and
they are working through it. So all I know is the coverage of the book
that I've seen, and that I've read in news reports of it.

I would say that in general, the President of the United States, any
President of the United States is criticized for lots of different
things. I think the results of the surge are undeniable. And in
Washington, sometimes you see that the process has been -- comes under
extra scrutiny, and can be picked apart in ways that aren't reflective
of the end result.

This President, it seems to me that he gets criticism that if he's
perceived to be careful or deliberative, he's accused of being slow.
And if he is decisive, he is accused of being impulsive and rash.

So with that said, I would just point to the fact that we would not
comment on any of the assertions in the book regarding the allegation
that you brought up. What I can tell you is we have extensive
cooperation with Prime Minister Maliki. Our ambassador sees him almost
daily. President Bush speaks to him by secure video teleconference at
least every other week, if not more. And we have a good idea of what
Prime Minister Maliki is thinking, because he tells us very frankly and
very candidly, as often as he can.

And that's one of the reasons we've been able to succeed in a lot of
these different areas, especially in the economic, diplomatic and
security areas.

Q But are you concerned, given the statements that are coming out of
Iraq today about that they want an explanation? If this is true it
could hurt relations. Are you concerned about statements like that?

MS. PERINO: As I said, I would not comment on it. To the extent that
they have any concerns, because we have the relationship that we have
with them, which is one that's very frank, open and candid and we have
contact with them every single day, I'm sure that they'll be talking
about it.

Laurent.

Q To follow up on that Dana, why are you not simply denying the
allegations in Woodward's book?

MS. PERINO: Why am I not denying what allegations?

Q Denying that there is -- that spying --

MS. PERINO: I didn't deny it. I said I declined to comment on it. And
I will decline to comment on it.

Q And also, what is the latest on the negotiations with the Iraqi
government on the strategic framework agreement? Is there a possibility
that any announcement on this will be coupled with an announcement on
the troop --

MS. PERINO: I don't believe so. I don't think that they're going to be
coupled. We still have some things to work out with them. And our
negotiators had a little bit of a break over the past week and I'm sure
they'll be starting that up again early next week and let me give you an
update when we -- when they get back. But I don't think that that
announcement would be coupled. If that changes I'll let you know.

Q Secretary Rice's trip to Libya today -- what should Iran and North
Korea take from that? Is there a parallel that could be applied to Iran
and North Korea?

MS. PERINO: Well, we take our relationships with countries on a case by
case basis. We have had a long and bad history with Libya, and that
began to turn around when they turned away from nuclear weapons and
terrorism. That country has radically changed its behavior. And
Secretary Rice's trip signifies a new chapter in U.S.-Libya bilateral
relations. What we want is to establish full relations with Libya,
including hopefully being able to announce a U.S. ambassador soon. It's
a symbol of the evolution of our relationship with Libya, that we are
working on evolving a relationship that could be built on trust and
mutual interest and mutual benefit.

Q There are a lot of comments being attributed to senior
administration officials about Libya's help in going after terror
suspects. Can you talk about that at all?

MS. PERINO: Well, I would say that we are increasing our cooperation
where we can with any country that is willing to work with us to fight
against terrorism. And Libya has certainly changed its behavior when it
came down to the -- their weapons of mass destruction and their
capability of producing weapons of mass destruction, and also their
pledge to work with countries on matters of the global war on terror.
And I'll let Secretary Rice read out her meeting after she's able to
attend and meet with the officials there.

Goyal.

Q Two quick questions. One, is President aware of secretive letter
was written by the State Department to the Congress about the U.S.-India
civil nuclear agreement, that if India tests any nuclear weapons,
nuclear test, that the fuel will be stopped now? The government in
India, Mr. Singh's government in trouble again about this agreement
because they were about to ratify that agreement but now, again, because
of this letter.

MS. PERINO: Let me just reiterate something that the State Department
has said the past couple of days, which is that questions for the record
-- they're also called QFRs -- that are asked for, from Congress to the
administration, often are not made public. Congress usually treats
those as a direct communication between the executive branch and the
legislative branch. The QFRs that were made public reiterated our
longstanding position and we hope that this -- we could put this behind
us and be able to move forward and get this agreement done.

Q And second, as far as cross-border terrorism and Afghanistan
situation and the attacks in Pakistan is concerned, now Zardari, Mr.
Zardari will be the next President of Pakistan, replacing Musharraf. My
question is that, let's say, if the -- if U.S. gets Osama bin Laden, do
you think the violence will go down -- or Osama bin Laden is the central
figure point on this war, global war on terrorism?

MS. PERINO: I'm not sure which question you want me to answer, but let
me take --

Q If we catch, let's say, Osama bin Laden, that now like I think we
are after Osama bin Laden dead or alive -- let's say if we bring him to
justice, do you think violence will go down as far as terrorism is
concerned?

MS. PERINO: I think that would remain to be seen. The President has
asked his intelligence community every week -- every day that he sees
them, but I know that he has threat assessment every week at his intel
briefing and he wants to know where we are in the process of tracking
him down and bringing him to justice.

Violence will go down once people renounce terrorism and that's why
we're working with countries like Pakistan. We respect Pakistan's
sovereignty. We are working to cooperate with this new civilian
government. You said that Zardari will be the next President -- we'll
see what happens in tomorrow's elections, although I think that you're
probably on the right track there.

And we'll continue to work with them. We need to have their
cooperation. One of the reasons that they're -- that Zardari will
become the President is because, unfortunately, his wife was killed by
terrorists, so they have a mutual interest in trying to go after
terrorists, and that's what we're going to continue to do with them.

Paula.

Q On the energy bill, the President, you said, wants Congress to
finish work on that, but doesn't the President intend to veto that bill
if it's paid for by getting rid of certain oil and gas tax breaks?

MS. PERINO: Look, let's just see if they can even get a bill to our
desk and then we'll -- or a bill out to the floor and then we'll do a
statement of administration policy. But I think a clean bill that would
allow for exploration of more resources here in our own country
offshore; also here -- in the West for oil shale; and also extending
renewable energy tax credits. Those are the three main components of an
energy bill that we would like to see.

We don't think it should become a Christmas tree that's just brought
down of its own weight, because we won't be able to support it. If
they're serious about trying to work on an energy bill that would help
this economy, then they should go ahead and pass a clean bill. We've
given them the road map to do so.

Q By "clean bill," then you're saying it shouldn't be paid for by oil
and gas --

MS. PERINO: As I said, let's just see -- let's see what kind of bill
that they can put forward and we'll take it from there.

Q I'm sorry, one more question on those economic growth numbers or
the job loss numbers -- you did point to productivity being higher, but
isn't that a two-edged sword in that sometimes you accomplish higher
productivity by needing less workers to do more work?

MS. PERINO: You know what, Paula, as I said, when it comes to
economics, what I can do is point you to the numbers, which is that
productivity was at 3.4 percent, which was considered a good number by
the economists that look at this from our perspective. And we're going
to continue to work with Congress. What we'd like to see is everybody
who wants to have a job in America should be able to have a job.